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Ampere IPO: Everything you need to know about Renault’s Ampere

Article By: ,  Financial Writer
September 11, 2023 4:26 PM

What do we know about the Ampere IPO?

Renault’s electric vehicle division, Ampere, has announced intentions to go public sometime in the spring of 2024. This listing would make the EV arm of the French automobile manufacturer its own entity, splitting the business into two sections: Ampere for EVs and Horse for combustion engines.

On Monday, Renault CEO Luca de Meo told the Financial Times he expects Ampere be valued anywhere from eight to ten billion euros after launching but declined to give a specific figure. The CEO suggested more news on a valuation target will come after speaking to international investors.

Renault intends to keep the majority of Ampere shares post-IPO. Renault’s two alliance partners, Nissan and Mitsubishi may also invest in the new entity during the listing. Earlier this year Nissan published their intent to buy a 15% stake, but Mitsubishi has yet to release whether they will also invest.

How to trade the Ampere IPO

Once Ampere has been listed, you’ll be able to trade its shares in the same way as any other stock on the market.

In the meantime, you can trade shares with City Index in these easy steps:

  1. Open a City Index account, or log in if you’re already a customer
  2. Search for the company you want to trade in our award-winning trading platforms
  3. Choose your position and size, and your stop and limit levels
  4. Place the trade

Alternatively, you can practise trading shares in a risk-free demo account.

What is Renault’s Ampere?

Ampere is the electric vehicle and software manufacturing division of the Renault Group. Launched in November 2022, Ampere develops, manufactures and sells commercial EVs under the Renault brand.

The French automaker has promoted Ampere as “the first EV and software pure player born from an OEM disruption.” Renault claims Ampere will lower parts diversity by 30%, reach 90%

battery-to-wheel e-powertrain efficiency and improve manufacturing productivity to less than 10 hours per vehicle.

So far, Ampere has produced one EV currently on the market. The Renault Megane E-Tech Electric starts at £32,346 with the option of a 40kWh or 60kWh battery pack, providing 186 and 292 miles respectively on a full charge.

How much is Ampere worth?

While current CEO de Meo mentioned an estimate upwards of €8 billion, he cautioned that the markets will ultimately decide the EV company’s value.

Swiss investment bank UBS previously suggested Ampere might reach a value between 3 and 4 billion euros, which de Meo claims does not account for Ampere’s total portfolio of assets including manufacturing plants and engineers.

How does Ampere make money?

Ampere makes money through the sale of its electric vehicles. Currently, only the Renault Megan E-Tech is available for purchase, but Ampere plans to release seven additional models in the coming years.

In a release announcing the IPO, Renault Group has highlighted steps to severely reduce production costs while pioneering breakthrough vehicle software developments in an effort to quickly reach profitability.

Is Ampere profitable?

Ampere is still a segment of Renault Group, so its specific profitability is unknown. However, Renault reported a net loss of €260 million for the first half of 2023 encompassing all business segments.

With the announcement of a 2024 IPO separating Ampere from the rest of Renault, the EV maker has stated intentions to become profitable by 2025.

What is Ampere’s business model?

Ampere has stated its goal is to deliver “appealing products at the best price… to democratize technology and create value for our stakeholders.” De Meo has highlighted Ampere’s “state of the art” engineering and manufacturing capabilities and a cost reduction target of 40% by the second generation of vehicles.

Ampere plans to produce eight vehicles for its initial line-up including the previously released Renault Megane E-Tech Electric. The automaker is currently building out production facilities in northern France it hopes will be capable of producing 1 million units a year by 2031.

In addition to Renault’s alliance with Mitsubishi and Nissan, the Renault Group is working with Qualcomm, Google and Valeo to develop Ampere’s Software-Designed Vehicle (SDV) offerings.

Financially, Ampere has stated intentions to achieve a 30% compound annual revenue growth rate (CAGR) from now until 2030. The EV manufacturer aims to breakeven its operating profit and free cash-flow in 2025, eventually reaching double-digit profit margins by 2030.

Ampere plans to leverage Renault’s entrenchment in the European auto market, taking advantage of its parent company’s brand awareness and field presence in 4,700 dealerships across Europe.

More information on Ampere’s future plans is expected to be announced at a Renault capital markets day later in the year.

Who are Ampere’s competitors?

Ampere’s competitors including several notable European automakers that have turned their focus to EV production in the past decade. German automakers Audi, Volkswagen and BMW have all gotten into the EV game, each producing several models over the past few years.

Polestar is another rising player in the European market. Headquartered in Sweden, the Volvo sub-brand highlights a commitment to sustainability similar to Ampere. Formed in partnership with Geely Holding Group, Polestar offers a comprehensive subscription service that includes insurance, charging services and maintenance along with its vehicles.

American EV upstart Tesla also remains a prominent brand across Europe. It’s currently tied with Volkswagen for the most in-demand EV company on the continent. According to counterpoint Research, the top five EV models sold in Europe in Q1 of 2023 include the Tesla Model Y, Volvo XC40, Telsa Model 3, Volkswagen ID.3 and Audi Q4 e-tron.

Who owns Ampere?

Ampere is wholly owned by The Renault Group, which plans to maintain a majority stake in the company once it’s listed as a separate, public entity. Renault’s alliance member Nissan has already pledged to buy a 15% stake, and Mitsubishi has the option to make a similar play.

The number of shares Ampere plans to float on the Paris Stock Exchange is currently unannounced.

Ampere management team

Ampere is managed by Renault CEO Luca de Meo. Former Renault executives Joep Maria Recasens and Vincent Piquet serve as the COO and CFO, respectively.

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